cooking oil

Cooking oil on sale at a supermarket in Nyeri town on April 17. There is an ongoing investigations on irregular importation of multibillion-shilling edible oils, rice, sugar and maize.

| File | Nation Media Group

CSs, parastatal head in hot water over duty-free food imports deal

What you need to know:

  • The three are wanted to shed light on the deal that was intended to ease the cost of living but ended up having minimal impact on consumer prices.

Two Cabinet secretaries and a powerful parastatal boss have been sucked into the ongoing investigations on irregular importation of multibillion-shilling edible oils, rice, sugar and maize, the Nation has reliably learnt.

The Directorate of Criminal Investigations (DCI) wants the three to shed light on the duty-free imports, which were intended to ease the cost of living but ended up having minimal impact on consumer prices.

Details of the expanded probe emerged even as the DCI, for the second day running, yesterday grilled directors of the Kenya National Trading Corporation (KNTC), including the Managing Director Pamela Mutua, and some staff of a local commercial bank over the questionable transactions.

“The probe is to be escalated to ministries on the role they played,” said a reliable source familiar with the ongoing investigations.

KNTC, which was the main vehicle used to ship in the edible oil, is a State corporation under the Ministry of Investment, Trade and Industrialisation; while permits for duty-free imports of rice, sugar and maize are issued by the National Treasury on the advice of the Ministry of Agriculture.

The Nation established that the KNTC directors were released late last evening as Director Public Prosecutions (DPP) Renson Igonga declined to charge them or get leave from the courts to continue holding them pending completion of the investigations.

Multiple sources at the DCI indicated that the Mohamed Amin-led agency intended to prefer miscellaneous charges against the suspects after the interrogations. The investigations have not only focused on the Sh16.5 billion imports of edible oils, but also on the Sh6 billion duty-free imported food commodities including maize, sugar and rice.

According to the DCI officials, the DPP has opposed the decision to charge the suspects before conclusion of the investigations and demanded that the file be made available to him first.

In the expanded investigations, the two ministers are accused of acting in cahoots with the KNTC directors to award the importation tender to a parastatal boss, whose consignment the local dealers have declined to sell on the State agency’s behalf, terming it sub-standard.

“We will also invite the CSs and all those who won the tenders as well as the unsuccessful bidders as we seek to ascertain whether the tendering was above board. This investigation will also seek to determine whether taxpayers’ money was lost,” said the officials who declined to disclose more details.

Trade CS Rebecca Miano lifted the lid on the ongoing investigations on Tuesday when she informed a Senate committee conducting an inquiry into the edible oils saga that Ms Mutua was with the DCI and could not honour the invite to explain to the committee why they were denied access to KNTC warehouse.

The CSs are sought over alleged interference with the procurement process following reports that they pushed for the consideration of specific firms.

When reached for comment yesterday, former Trade CS Moses Kuria, who was at the helm during importation of the edible oils, and Agriculture CS Mithika Linturi both denied knowledge of any ongoing investigations in their ministries. Both ministers have previously defended the imports as being above board in Parliamentary Committee hearings.

“Those are speculations. No further comment,” said CS Kuria, who is in charge of the Ministry of Public Service following a Cabinet reshuffle by President William Ruto, in a curt response to the Nation.

Mr Linturi said he has only defended the importation of subsidised fertiliser when he appeared before MPs, and not the duty-free imports of food commodities.

“I am not aware of those investigations, that is your creation. How do you create stories about investigations in my ministry? I am taking offence. You have said I am linked to the importation of edible oil. This is not the time you write bad stories and I keep quiet. There is no investigation on or in the Ministry of Agriculture. You write what you want. I am tired. How do you create investigations of my ministry (sic) that I am not aware of? The ministry investigation was about loss of fertiliser and people have been charged in court,” said CS Linturi.

The KNTC directors who were picked by DCI detectives on Monday evening are accused of making irregular decisions in the imports of the food commodities.

The chair of a key parastatal is alleged to have been favoured during the procurement process, only to deliver the sub-standard commodity that now lies idle at the KNTC warehouse in Industrial Area, Nairobi. She is said to have been paid all her dues.

“The interrogations went on till late yesterday (Tuesday). We will try to get as much information as possible from the suspects,” said another officer, even as Mr Amin is yet to go public with the details of the arrest.

When President Ruto last month ordered investigations into the finances of three senior-ranking government officials implicated in the scandal, reports were that the three inflated the prices of imported edible oil. They were accused of inflating the price of the cooking oil by an average of $7 per litre, thus negating the original intention of the government in importing the edible oil to ease market prices.

The debacle prompted President Ruto to direct Head of Public Service Felix Koskei to write to the Ethics and Anti-Corruption Commission (EACC) to open investigations with a view to prosecuting those involved.

The EACC formally opened investigations on the alleged embezzlement of public funds at the agency through irregular award of tenders for supply and delivery of food commodities during the financial years ending June 2023 and 2024.

The EACC wrote to Ms Mutua demanding original documents of the importation of food commodities, including the board resolutions, details of the loan sought through Kenya Commercial Bank (KCB) and all accounts of KNTC.

The EACC also sought the tender documents, details on the delivery and supply of the commodities, the companies that bid for the tenders and the tax waivers issued by the National Treasury and KRA.

“It is a complex probe. It extends beyond the edible oils to all the food commodities imported during the duty-free waiver. There is also a state officer whose company was involved, and we are pursuing this line to ensure the exercise was above board,” said another officer, as efforts to get more details proved futile.

Former Mandera Senator Billow Kerrow had months earlier publicly poked holes into the importation of the commodity, claiming that it was a scandal waiting to happen.

“Imported duty free cooking oil fills up KNTC Mombasa warehouse and is stored in an open yard. Overpriced, inferior quality that cannot be sold with VAT except at a huge loss! A misadventure driven by greed, gone sour!,” Mr Kerrow posted on his official X account.

He tagged State House, EACC and KRA.

Mr Kuria at the time defended the imports, saying, the deal was above board. The KNTC is now reported to be stuck with dead stock that is set to expire next month.

In July, Mr Kuria said the ministry had sought oil dispensers from Indonesia, targeting distributors in informal settlements.

The importation of the edible oils began last year in October, when Mr Kuria was at the helm of the Trade ministry, following an approval by the Cabinet.

“I instructed KNTC to import edible oil with a target that one kilo of edible oil would retail at Sh250 ... the price of oil has gone down today to Sh218 per litre,” Mr Kuria had said at the time while appearing before the Senate.

He told senators that the idea was mooted to protect Kenyans from cartels in order to arrest the high costs of edible oils.

Nonetheless, controversy dogged the importation after it emerged that KNTC single-sourced companies contracted to import 125,000 metric tonnes of edible oil with industry wars and alleged personal interest in the dealings resulting in the project failing to deliver cheaper cooking oil to Kenyans.